The Impact Of Multinational M & A On China 's Automobile Industry

The level of development of the automotive industry reflects the comprehensive strength and technology level of the states. Automobile penetration rate is reflects the living standards of residents in the states.After decades of development, Chinese automotive industry has made great achievements, and initially formed of a complete industrial chain from the vehicle to the parts. The production and sales of automobile in China had been ranking the first in the world for past two years. But, there is a big disparity in the market influence of the independent brands and automobile and the products and services that national enjoy, between China and the United States, Japan, Germany etc automotive power.The basis of the automobile industry chain formed after years of developing. But the large state-owned automobile plants have joint ventures with international auto giants. The joint ventures have been product foreign brands car. Although there are restrictions on foreign equity protection policy, due to the lack of technology, brand, and channels, the Chinese shareholders have no voice in the joint ventures. The auto parts enterprises as the basic of the vehicle industry, most leaders of them had been merged by foreign parts giants. As China’s automobile industry representative, the independent brand automobile enterprises have faced with the continued price cutting joint venture brands, as well as a substantial reduction in tariffs and other import cars significantly lower prices. And consumer keeps improving requirement to automotive products and services. So the independent brands felt more and more difficult to survive with the low-cost advantage.This paper explores the development of Chinese auto industry in the above causes, analysis Chinese independent development of auto parts industry lag restrict the development of China Automotive industry. Further analysis shows that, the development of auto parts industry lag largely by the transnational parts giants M&A in China. The multinational components enterprises investment has certain simulative effect on the Chinese auto industry in China, but in long-term the monopoly in some areas, will hinder the development of Chinese automobile industry. The article analysis the development of Chinese auto industry and auto parts industry and the M&A of the giants, based on cross-border M&A and the basically theories of foreign direct investment (FDI). By anglicizing the Bosch as represent of auto parts giant have done much merger and integration in China. They have merger some Chinese company with technical advantage, resource and channel, changing them to subsidiary company or supplier. And then the giants have got monopoly in certain key areas of automotive parts.In the above analysis, the paper proposes that the further development of Chinese auto industry, there must be a strong auto parts industry as a supporter. At first, monopoly of multinational companies has been broken. Integration through the acquisition of Chinese auto parts industry is an important choice...